Do Consumers Pay Voluntarily? The Case of Online Music Volume 1 Jena Economic Research Papers 2007-05-01 2007 2007 social preferences reciprocity reciprocity experience goods experience goods emotions The paper analyses the payment behaviour of customers of the online music label Magnatune. Customers may pay what they want for albums, as long as the payment is within a given price range ($5-$18). Magnatune’s comprehensive pre-purchase access facilitates music discovery and allows an informed buying decision setting it apart from conventional online music stores. On average customers pay $8.20, far more than the minimum of $5 and even higher than the recommended price of $8. We analyse the relationship between artists/labels and customers in online music. We consider social preferences, in particular concerns for reciprocity. The resulting sequential reciprocity equilibrium corresponds to the observed pattern of behaviour. We conclude that Magnatune’s open contracts design can encourage people to make voluntary payments and may be a viable business option. 2007-011 jportal_jpjournal_00000016 2007-05-07T14:04:34.921Z 2010-12-17T11:53:25.455Z